Self-monitoring of blood glucose (SMBG) is considered the cornerstone of diabetes self-management; however, the test strips used for this practice are costly. On January 1, 2000, California enacted into law Senate Bill 64 (SB64) which resulted in Kaiser Permanente (KP) providing SMBG test strips free of charge to diabetic health plan members. Prior to this legislation, members paid varying amounts of copayments for test strip prescriptions. The broad, long-term objective of this proposal is to assess the impact of providing free test strips to patients with diabetes. Proposed Specific Aims include: 1) assessing legislation effects on individual level utilization of test strips (as a proxy for SMBG practice) and glycemic control, with special attention to disparities across ethnicity, socioeconomic status (SES) and disease severity; 2) evaluating the population-level impact of changes in glycemic control attributable to changes in adherence to recommended monitoring frequency; and 3) the cost-effectiveness of potential benefits. We hypothesize that after SB64, 1) test strip utilization increased on an individual level ("price-elastic demand"); 2) changes in strip utilization "explain" (mediate) a relationship between change in cost and change in glycemic control; and 3) on a population level, the elimination of financial barriers will reduce ethnic and socioeconomic disparities in monitoring frequency. This cohort study will include about 200,000 eligible Northern and Southern California KP health plan members identified as having diabetes. Standard hypothesis testing (regression) and estimation methods will be used for continuous and categorical variables to compare changes between the pre- (1999) and post- (2000-2001) legislation periods. We will also quantify the "legislation effect" by calculating a Generalized Impact Fraction, which assesses the reduction in poor glycemic control resulting from the increased frequency of adherent SMBG practice in the post-legislation period. We will use standard cost-effectiveness methods to assess the relationship between incremental costs and benefits in terms of improved adherence and glycemic control. The global and abrupt change caused by SB64 created a unique natural experiment, positioning us to study the influence of legislative policy on diabetes self-management practices, whether eliminating financial barriers decreases ethnic and socioeconomic health disparities, and to what extent changes in SMBG practice impact glycemic control. Proposal strengths also include a longitudinal design, substantial statistical power, low cost data acquisition, and an ethnically diverse population with uniform access to care.